Not That InnocentNot That InnocentNot That InnocentNot That Innocent

A COMPARATIVE ANALYSIS OF CANADIAN, EUROPEAN UNION AND UNITED STATES POLICIES ON INDUSTRIAL CHEMICALS

APRIL 2007

Not That Innocent

A COMPARATIVE ANALYSIS OF CANADIAN, EUROPEAN UNION AND UNITED STATES POLICIES ON INDUSTRIAL CHEMICALS

APRIL 2007

RICHARD A. DENISON, PH.D.

Senior Scientist, Health Program, Environmental Defense

Washington, DC USA

In cooperation with Pollution Probe

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Acknowledgments Many people helped me enormously in the preparation of this report, providing advice and guidance, directing me to needed sources of information, educating me and explaining the complexities of the various policies, serving as reviewers of the initial draft, assisting in the development and fact-checking of the comparison tables, editing the report for clarity, providing support and encouragement and countless other ways. Rather than try to identify—and remember—all of the specific ways in which people helped, I simply list them below, with sincere thanks, and apologies to anyone I may have inadvertently omitted. Of course, the views expressed herein, as well as any mistakes and omissions, are solely my responsibility. Finally, I wish to gratefully acknowledge funding and travel support from Health Canada and Environment Canada, through a Contribution Agreement with Pollution Probe. My time was also generously supported by the Beldon Fund. Thanks to the following individuals (in alphabetical order): John Arseneau, Andrew Beck, Hugh Benevides, Mark Blainey, Ronald Boyd, Morley Brownstein, Steve Clarkson, Allison Cobb, Anna Coutlakis, Fé de Leon, Daryl Ditz, Danie Dubé, George Enei, Rick Findlay, Aaron Freeman, Lori Fryzuk, Johanne Gélinas, Joe Guth, Bjorn Hansen, Virginia Harel, Kathryn Hughes, Laurie Hunter, Kapil Khatter, Louis L'Arrivée, Gordon Lloyd, Patricia MacLellan, Bernard Madé, Cathy Malina, Bette Meek, David Miller, John Moffet, Ken Ogilvie, Louise Power, James Riordan, Shaunalea Savard, Jacinthe Séguin, Eric Sevigny, Melissa Shaw, Jacqueline Sitwell, Bill Smith, Mary Taylor, Joel Tickner, Ken Traynor, Kees van Leeuwen, James Van Loon, Mike Wilson, Anne Woodsworth and Cynthia Wright. Environmental Defense is dedicated to protecting the environmental rights of all people, including the right to clean air, clean water, healthy food and flourishing ecosystems. Guided by science, we work to create practical solutions that win lasting political, economic and social support because they are nonpartisan, cost-effective and fair. www.environmentaldefense.org Contact: Richard A. Denison, rdenison@environmentaldefense.org Pollution Probe is a leading not-for-profit environmental organization actively engaged in initiatives to address air and water pollution, climate change and toxic substances. Our focus is on conducting research, engaging partners, implementing projects, holding events and contributing to the development of new policies to honour Canada’s commitments to clean air, clean water and reducing greenhouse gas emissions. www.pollutionprobe.org Contact: Ken Ogilvie, kogilvie@pollutionprobe.org

© 2007 Environmental Defense

This report is available online at www.environmentaldefense.org/go/chempolicyreport.

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Executive Summary Industrial chemicals are ubiquitous in our world today. They are the feedstocks and intermediates that propel the manufacture of virtually every material we use, and the ingredients in the tens of thousands of consumer and commercial products we consume every day. But in recent years, evidence for another kind of ubiquity of such chemicals has begun to emerge. Despite their widespread use, until recently the prevailing wisdom was that exposure to most industrial chemicals was unlikely, especially outside of occupational settings. We now know that some of these chemicals have accumulated in the bodies of virtually all people, and in wildlife and the ecosystems of the remotest regions on Earth. Yet we are only beginning to understand how they got there and what their presence means to our—and our planet’s—health. For decades, our policies toward such chemicals have effectively presumed them to be safe, despite the dearth of data available to demonstrate either their safety or adverse impacts. Today there is increasing evidence that certain of these chemicals play a role in human disease and environmental impacts. These factors—the widespread presence of chemicals in humans and the environment, the growing evidence that some of them can cause harm, and the inability of our policies to have predicted or prevented such impacts—have lent urgency to calls for major reforms in industrial chemicals policies worldwide. A sea change is taking place, driven by a growing recognition that existing policies have failed to effectively identify chemicals of concern, to manage their risks, and to facilitate the needed shift toward development and use of safer chemicals. For the last several decades, government policies have granted the tens of thousands of industrial chemicals already in commerce a strong “presumption of innocence.” In the absence of clear evidence of harm, companies have largely been free to produce and use such chemicals as they’ve seen fit. These policies contrast sharply with the approach—closer to “presumed guilty until proven innocent” —adopted for other classes of chemicals such as pharmaceuticals and pesticides. For these substances, producers have the burden of providing information to government deemed sufficient to demonstrate their safety, at least when used as intended. By contrast, for industrial chemicals, the opposite is true: Government—and hence the public—shoulders the burden of proof. In what amounts to a classic Catch-22, government must already have information sufficient to document potential risk, or at the very least, extensive exposure, in order to require the development of information sufficient to determine whether there is actual risk. These policies place an even higher burden on government to act to control a chemical based on any information it does manage to obtain that is indicative of significant risk. To extend our courtroom analogy, government must effectively prove beyond all reasonable doubt that a chemical poses a risk before it can take any action to restrict its production or use. And it must typically make its case despite operating under a highly constrained “right to discovery,” with quite limited options for obtaining or compelling the generation of information from producers or users of the chemical. One profound consequence of such policies is that government, the public and often the companies that produce and use these chemicals know very little about the potential risks of most

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of them. Moreover, companies have little or no incentive to develop better information: To undertake such activity voluntarily is likely to be seen by a company as only increasing the likelihood that evidence of harm will be uncovered, triggering government action. The lack of good information means that we do not know which chemicals may pose risks, nor do we know which ones pose little or no risk, and hence might serve as viable substitutes. After decades of this relatively passive approach, change is in the air. Efforts are finally being mounted to address this legacy of un- or under-assessed chemicals. Among them:

• The voluntary High Production Volume (HPV) Chemical Challenge in the U.S., which is developing basic screening information on the potential hazards of some 2,000 of the highest-volume chemicals in use in the U.S.

• Canada’s recently completed Domestic Substances List (DSL) Categorization, mandated by law in 1999, which for the first time examined information available on the roughly 23,000 previously unassessed chemicals that have been in commerce in Canada over the last two decades, and identified more than 4,300 warranting further scrutiny of their potential risks.

• Most ambitious of all, the European Union’s new regulation called REACH, which stands for Registration, Evaluation, Authorization and Restriction of Chemicals. Adopted in December 2006, REACH will require producers and users of an estimated 30,000 chemicals in commerce in Europe to register them and provide information on their production, use, hazard and exposure potential. For chemicals identified as “substances of very high concern” REACH will allow their use only if explicitly authorized.

These examples serve as microcosms of the chemicals policies in these jurisdictions, and provide insight into both the opportunities and the limitations offered by each.

Best practices for the core functions of chemicals policies This report identifies “best practices” gleaned from a comparative look at the U.S., Canadian and EU approaches to chemicals assessment and management. These policies include a number of common elements related to the core functions they are intended to serve. This report is structured around the six functional elements listed below:

• Identifying and prioritizing chemicals of concern

• Identifying and tracking chemicals and their production and use

• Facilitating or requiring the generation and submission of risk-relevant information

• Assessing information to determine hazard/exposure/risk

• Imposing controls to mitigate risk

• Sharing and disclosing information and protecting confidential business information “Best practices” in relation to the features of each of the three (U.S., Canadian and EU) policies are summarized here, and are more fully developed in the indicated sections of the body of the report.

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IDENTIFYING AND PRIORITIZING CHEMICALS OF CONCERN (SECTION II) Chemicals policies should be underpinned by clear criteria for identifying chemicals of concern, determining information requirements, prioritizing chemicals for assessment and deciding whether and what risk management is needed. Hazard- and exposure-specific, as well as risk-based criteria, should be articulated. In comparison:

• In the U.S., criteria are few, not clearly articulated and usually presented as general guidelines to be applied on a case-by-case basis. As a result, there is little transparency or clarity regarding how the U.S. Environmental Protection Agency makes decisions as to which chemicals it is concerned about, how they are to be identified or prioritized, or when risk assessment or risk management is warranted. Although flexibility and expert judgment have their place, so do clarity and accountability for decisions.

• In Canada, greater use of hazard and exposure criteria is made, especially in the DSL Categorization process. Canada also uses production quantity and release criteria in determining information requirements for new chemicals. It has articulated relatively clear criteria for defining toxic substances and for listing them as toxic substances or candidates for virtual elimination.

• It is expected that REACH will make extensive use of hazard criteria for the purpose of identifying and managing chemicals of concern.

IDENTIFYING AND TRACKING CHEMICALS AND THEIR PRODUCTION AND USE

(SECTION III) 1. Notification: For new chemicals that are allowed to be manufactured by the notifier only if in compliance with specified conditions, any other company seeking to produce or import the same chemical should be required to go through a full notification and review process. In comparison:

• In the U.S., except in the relatively small number of cases where EPA has issued a Significant New Use Rule to accompany its decision concerning a Premanufacture Notification, any subsequent company may produce or import a chemical without EPA’s knowledge or ability to know the practices it is using or the uses of the chemical.

• Canada already has this requirement.

• REACH requires each producer or importer of a chemical to register it, either with other producers or individually.

2. Updating information on chemical manufacture and use: A combination of frequent regular reporting of chemical manufacture, downstream processing, use and exposure information, and a requirement to report at once any significant changes in such

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information, would provide the best means for government to effectively track chemicals in commerce. Ideally, annual reporting should be required; if actual reporting is done less frequently, annualized quantities and use patterns should still be reported for each year in the reporting cycle. In comparison:

• The U.S. system has regular reporting, but only every five years. It has no generally applicable requirement to report significant changes. Some information regarding exposure is required, and for high-volume chemicals, downstream processing and use information must be reported.

• REACH will have no regular reporting, but will require reporting of any significant changes and as each registration tier is reached.

• The Canadian system lacks regular reporting, and only has tiered notifications for new chemicals up to 10,000 kilograms/year.

FACILITATING OR REQUIRING THE GENERATION AND SUBMISSION OF RISK-

RELEVANT INFORMATION (SECTION IV) 1. New chemicals information requirements: A tiered notification or registration scheme should be employed for new chemicals, with increasing information required as production increases and the extent or diversity of uses expands. Consideration should be given to requiring a first notification at the premanufacturing stage, even in the absence of a significant data requirement, to provide government with an early opportunity to flag potential concerns. Such an approach needs to be coupled with subsequent notifications, however, including one to follow commencement but prior to reaching significant levels of manufacture. Government should have broad authority to request additional information if it is needed to conduct a thorough assessment. Government should be authorized and required to re-review chemicals as they reach higher tiers, to determine whether potential hazards or exposures have changed and whether additional information or risk management is needed. In comparison:

• In the U.S., notification is premanufacture, which can allow for potential concerns to be addressed early. The great majority of notifications have virtually no risk data, however, and EPA must negotiate with notifiers on a case-by-case basis to provide information. EPA has no authority to reassess a chemical after it has entered commerce, unless it has imposed a requirement on the producer or importer of a specific chemical to generate and submit additional information at some point after manufacture has commenced.

• A tiered notification or registration approach is already employed in Canada and will be used in the EU under REACH, with specific data requirements delineated at each tier, but applied only after manufacture has begun.

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• Unlike notification under the Canadian Environmental Protection Act (CEPA) and the U.S. Toxic Substances Control Act (TSCA), REACH does not tie registration to government review, so that chemicals may begin or continue manufacture even in the absence of review.

2. Existing chemicals—Generation and submission of information: Government should have broad authority to require, without having to demonstrate potential or actual risk, industry to generate and submit test data or other information government deems necessary to gain a thorough understanding of the potential risks of any chemical of interest or concern. Government should be required to seek such information where it already has evidence of potential risk from an existing chemical. Producers and users of chemicals should be required to immediately report information they generate, receive or become aware of that suggests a chemical they produce or use could pose a significant risk. In comparison:

• In the U.S. and Canada, government must have sufficient evidence of potential risk or toxicity of, or extensive potential exposure to, a chemical in order to require industry to generate new risk information. Given the dearth of such information typically available to government and the difficulty of making the requisite demonstrations without more information, this Catch-22 has meant testing and information development has not been required for the great majority of existing chemicals.

• In the U.S. and Canada, such risk or exposure findings are not necessary for government to require submission of already-existing information.

• In the U.S., imposition of any information generation or submission requirements typically must be done through full notice-and-comment rulemaking, whereas in Canada this can be done through publication of a notice by the Minister.

• In all three jurisdictions, producers and users of a chemical are obligated to immediately report new information that indicates significant potential risk.

• At the time of registration, REACH will require all manufacturers to submit available information and to generate (or propose to generate) and submit new information specified under the applicable registration requirements. To require a registrant to generate information beyond that specified under the applicable registration requirements, however, an extensive procedure must be followed that includes approval by the Member States or the European Commission and provides the registrant with the right to comment and to appeal the decision.

ASSESSING INFORMATION TO DETERMINE HAZARD/EXPOSURE/RISK (SECTION IV)

1. New chemical review and assessment: Government should be required to review all new chemicals, and should be provided with ample information and time to do so. Consideration should be given to requiring a first notification and review at the premanufacturing stage,

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even in the absence of a significant data requirement, to provide government with an early opportunity to flag potential concerns. Such an approach needs to be coupled with subsequent notifications, however, including one to follow commencement but prior to reaching significant levels, of manufacture. In comparison:

• In the U.S. and Canada, government review is required for new chemicals. Short timelines are provided for, however, and if a decision has not been reached before the review period elapses, manufacture of the chemical may commence. In the U.S., the premanufacture timing of new chemical review provides an opportunity for early identification of potential concerns, but the absence of a requirement for a minimum base set of information to be submitted with notifications severely hampers EPA’s ability to conduct a thorough and timely review.

• In Canada and under REACH, the first review comes only after manufacture has commenced, but is informed by a required minimum data set.

• Under REACH, new chemical assessment will be conducted by industry, not government. Any government evaluation of these assessments is entirely divorced from the registration process, with the result that new chemicals may commence manufacture or import—and potentially continue to do so indefinitely—without any government review or approval of the information provided by the registrant or of the risk management measures being utilized.

2. Existing chemical review and assessment: Government should provide formal mechanisms by which existing chemicals may be identified as priorities for assessment, including nomination by members of the public, and a transparent process by which decisions to conduct assessments are made within a reasonable timeframe. Decisions by state or provincial governments or international bodies to prohibit or restrict a chemical should trigger a mandatory assessment. Government should also be required to reach affirmative decisions—which can include a decision that no further action is necessary—and make public those decisions and the basis for them, within a reasonable time period, regarding any assessments it conducts. In comparison:

• In the U.S., no such formal processes exist.

• In Canada, such processes are specified.

• Under REACH, government has authority to assess existing chemicals; processes for selecting chemicals for assessment (evaluation) are specified, and once selected, processes and timelines for conducting assessments are also specified. However, no minimum number or indication of the approximate pace at which such assessments must be carried out is specified. Pending such assessments, the only information regarding the chemical, its risks and the appropriateness of any risk management employed is what the registrant has supplied.

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IMPOSING CONTROLS TO MITIGATE RISK (SECTION VI) 1. Risk management for new chemicals: Criteria based on hazard or exposure characteristics should be established to identify chemicals of high concern, and government should be authorized and required to impose risk management measures on chemicals that meet the criteria. In comparison:

• In the U.S. and Canada, few if any such criteria have been developed, with the result that risk management actions on new chemicals are taken almost entirely on a case-by-case basis, relatively infrequently, and in a non-transparent manner.

• REACH will establish such criteria. 2. Risk management for existing chemicals: The determination as to whether an existing chemical is of sufficient concern to require the imposition of risk management should be based solely on its hazard, exposure or risk characteristics. Socio-economic factors may play a role in determining what measures should be mandated, but should not influence the decision about whether a chemical warrants control. The burden on government to manage the risks of existing chemicals should not be higher than for new chemicals, and government should be able to impose controls to address potential as well as documented risks. In comparison:

• In the U.S., socio-economic factors play a central role in the findings EPA must make to regulate an existing chemical, and the burden is much higher for existing chemicals than for new chemicals.

• In Canada, the “whether” vs. “how” decisions are more separate, and potential risk is included in the definition of “CEPA-toxic” used to trigger risk management actions (see Section II of this report). It is unclear, however, whether these factors actually enable Canada to more easily address the risks of existing chemicals.

• On paper at least, REACH appears to meet this best practice, but it does not have an implementation track record to examine.

SHARING AND DISCLOSING INFORMATION AND PROTECTING CONFIDENTIAL

BUSINESS INFORMATION (SECTION VII) 1. Confidential business information (CBI) and information disclosure and access: In order for submitted information to be kept confidential, submitters should be required to:

• specify precisely what information is requested to be kept confidential;

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• make such a request at the time of submission and provide a full justification and documentation, in writing; and

• specify and justify a time period for which the request is made. Government should be required to:

• specify what information must accompany any confidentiality request, including what grounds constitute acceptable justification and under what conditions such requests are allowed;

• review, in a timely manner, all confidentiality requests as part of its action on the submitted information, and determine whether to accept or deny the requests; and

• where a request is accepted, set a time period after which disclosure may occur unless a new request is submitted and accepted.

Government should be able to:

• disclose submitted information for which it has rejected a confidentiality request, after providing a reasonable opportunity for the submitter to rectify the request; and

• disclose CBI when it is in the public interest. Health and safety information should never be eligible for CBI protection. As a rule, the identity of the associated chemical and of the submitter of the information should also be ineligible; government should explicitly state the basis for any exceptions. Workers should have access to all available information, whether or not CBI-protected, concerning chemical identity, properties, hazards and workplace exposures for any substance with which they work or to which they could be exposed during work. Other governments, whether those of domestic states, provinces, municipalities, Tribes or foreign countries, should be given access to CBI for the purpose of administration or enforcement of a law, under appropriate agreements and where the recipient takes appropriate steps to keep the information confidential. Governments should ensure they have access to chemical information, including CBI, that is submitted to other governments, which may be needed or useful in their administration or enforcement of domestic laws. Means to accomplish this should include:

• instituting a requirement that companies submit any risk-related information they submit to another government for chemicals they produce, import or use domestically;

• negotiating agreements with their counterparts in other governments for full access to chemical information, including CBI, submitted or otherwise available to those governments; and

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• ensuring that sufficient resources are made available to establish or enhance existing information technology infrastructure so that it is capable of receiving, processing, utilizing and providing access to large volumes of chemical information.

Policies should include explicit requirements that government make readily and publicly available as much information as possible about chemicals as well as documentation of decisions and the basis for them. In comparison:

• In the U.S., disclosure of CBI is generally prohibited except where necessary to protect human health or the environment. EPA is not required to review and either accept or deny CBI requests, and upfront justifications are not routinely required. While it has developed criteria for what constitute legitimate CBI claims, it must challenge them on a case-by-case basis, which is highly resource-intensive. CBI claims have no expiration date, nor is there a requirement that they be reasserted and re-justified. Health and safety studies cannot be claimed as CBI—but the associated chemical and submitter identity generally can be. TSCA prohibits the disclosure of information claimed as CBI to anyone outside the federal government (other than contractors), including state, local, Tribal or foreign governments. TSCA does not generally mandate or encourage public disclosure of information not deemed confidential.

• In Canada, CBI may only be disclosed where it is in the public interest and that interest is found to clearly outweigh any private loss. CEPA calls for CBI claims to be supported by information prescribed by implementing agencies, which has been done in the guidelines for the notification of new substances. These guidelines require upfront justification to be provided and require government review and acceptance or denial of CBI claims. CEPA provides no specific exemption from CBI protection for health and safety information. For requests to consider chemical identity as CBI, the guidelines require relatively extensive information to be provided, which government is able to use to decide whether to grant such requests. CBI claims do not expire or require reassertion. Unlike TSCA, CEPA provides broad authority for the sharing of CBI with other governments, domestic and foreign. As in the U.S., CEPA does not generally mandate or encourage public disclosure of information not deemed confidential.

• REACH prescribes three classes of information: that generally to be considered CBI, that always to be made public, and that to be made public unless an acceptable justification for its protection as CBI is submitted and approved. Upfront justifications of CBI claims must be submitted at the time a claim is made. For new chemicals, the chemical identity can be claimed as CBI for up to six years; otherwise, REACH does not provide for the expiration of CBI status. In contrast to both TSCA and CEPA, REACH includes numerous provisions calling for public access to non-confidential information—including government decisions and the basis for them—and it mandates that most such information be made available on the internet, free of charge. As under CEPA, REACH provides broad authority to share CBI with other domestic and foreign governments.

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2. Information flow in the chemical supply chain: Government should act aggressively to facilitate, and where needed, require improved flow of information along chemical supply chains in both directions. These provisions of REACH should be carefully examined for applicability and adaptation to other jurisdictions.

Conclusion Implementation of the “best practices” identified in this report can facilitate a shift toward policies that are knowledge-driven, that motivate and reward, rather than impede and penalize, the development of information sufficient to provide a reasonable assurance of safety for chemicals. Such policies would also place more of the burden of providing and acting on that information on those who stand to profit financially from the production and use of chemicals, and are arguably in the best position to internalize such information and use it from the outset to design out risk from their products.

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TABLE OF CONTENTS Acknowledgments ................................................................................................................. ii Executive Summary .............................................................................................................. iii List of Tables .......................................................................................................................xv List of Acronyms .................................................................................................................xvi I. Introduction.................................................................................................................... I-1

Statutes forming the basis for the chemicals policies examined in this report ...................... I-5 Key elements of chemicals policies ........................................................................................ I-7 Box 1: Who should bear responsibility? ................................................................................ I-7

II. Identifying and prioritizing chemicals of concern ...........................................................II-1 UNITED STATES............................................................................................................II-1 CANADA .........................................................................................................................II-3 EUROPEAN UNION.......................................................................................................II-5 Best practice ....................................................................................................................II-8

III. Identifying and tracking chemicals and their production and use ................................. III-1 A. Chemical inventories ..................................................................................................... III-1

UNITED STATES.......................................................................................................... III-1 CANADA ....................................................................................................................... III-4 EUROPEAN UNION..................................................................................................... III-5 Best practice .................................................................................................................. III-7

B. Updating information on chemical manufacture and use.............................................. III-7 UNITED STATES.......................................................................................................... III-7 CANADA ....................................................................................................................... III-9 EUROPEAN UNION................................................................................................... III-10 Best practice ................................................................................................................ III-10

IV. Facilitating or requiring the generation and submission of risk-relevant information.....IV-1 A. New chemicals information requirements ..................................................................... IV-1

UNITED STATES.......................................................................................................... IV-1 CANADA ....................................................................................................................... IV-2 EUROPEAN UNION..................................................................................................... IV-3 Best practice .................................................................................................................. IV-5

B. Existing chemicals: Generation and submission of information ................................. IV-11 UNITED STATES........................................................................................................ IV-11

Voluntary data development efforts ................................................................. IV-13 CANADA ..................................................................................................................... IV-16

DSL Categorization.............................................................................................. IV-17 Box 2: Health Canada’s tools used to categorize and prioritize DSL chemicals ............................................................................................... IV-21 Box 3: The Canadian government’s Chemicals Management Plan ................. IV-24

EUROPEAN UNION................................................................................................... IV-26 Best practice ................................................................................................................ IV-30 Box 4: Ensuring the credibility of industry-generated data........................................ IV-31

V. Assessing information to determine hazard/exposure/risk............................................... V-1 A. New chemical review and assessment ..............................................................................V-1

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UNITED STATES............................................................................................................V-1 CANADA .........................................................................................................................V-2 EUROPEAN UNION.......................................................................................................V-2

Registration ................................................................................................................V-2 Evaluation ..................................................................................................................V-3

Best practice ....................................................................................................................V-5 B. Existing chemical review and assessment.........................................................................V-6

UNITED STATES............................................................................................................V-6 CANADA .........................................................................................................................V-7 EUROPEAN UNION.......................................................................................................V-9 Best practice ..................................................................................................................V-10

VI. Imposing controls to mitigate risk ...............................................................................VI-1 A. Risk management for new chemicals............................................................................. VI-1

UNITED STATES.......................................................................................................... VI-1 CANADA ....................................................................................................................... VI-2 EUROPEAN UNION..................................................................................................... VI-4

Authorization........................................................................................................... VI-4 Box 5: The role of substitution in REACH authorization................................. VI-4

Restriction ................................................................................................................ VI-8 Best practice .................................................................................................................. VI-9

B. Risk management for existing chemicals ..................................................................... VI-10 UNITED STATES........................................................................................................ VI-10

Voluntary initiatives ............................................................................................... VI-11 CANADA ..................................................................................................................... VI-12

Voluntary initiatives ............................................................................................... VI-14 EUROPEAN UNION................................................................................................... VI-16 Best practice ................................................................................................................ VI-16

VII. Sharing and disclosing information and protecting confidential business information VII-1 A. Confidential business information (CBI) and information disclosure and access........VII-1

UNITED STATES.........................................................................................................VII-1 CANADA ......................................................................................................................VII-2 EUROPEAN UNION....................................................................................................VII-5 Best practice .................................................................................................................VII-9

B. Information flow in the chemical supply chain...........................................................VII-11 Information flow down the supply chain...................................................................VII-12 Information flow up the supply chain........................................................................VII-13 Best practice ...............................................................................................................VII-13

Conclusion................................................................................................................... VII-14 APPENDIX A.................................................................................................................. A-1 APPENDIX B .................................................................................................................. A-4

Key differences between assessing hazard and exposure...............................................A-12 Implications for integrated approaches that incorporate exposure information...........A-13

APPENDIX C................................................................................................................ A-15 APPENDIX D ............................................................................................................... A-23

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List of Tables Page Table 1: ComHaz Endpoint-Specific Qualitative and Quantitative Criteria II-6 Table 2: Inventory Comparisons and Statutory Exclusions III-2 Table 3: Substances Subject to, Excluded and Exempt from New Substances Notification/Registration III-3

Table 4: Comparison of Required Hazard Information Elements for All Chemicals under REACH and New Chemicals under CEPA, Optional Elements for New Chemicals under TSCA, and Voluntary Elements under US HPV/OECD SIDS

IV-6

Table 5: DSL Chemicals for which Low-confidence or No Determinations Were Able to be Made IV-19

Table 6: Regulatory (and Voluntary Testing) Actions on 36,600 PMNs Reviewed through 30 September 2005 VI-2

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List of Acronyms 4CA Four Corners Arrangement ACC American Chemistry Council B Bioaccumulation BAF Bioaccumulation Factor BCF Bioconcentration Factor CAS Chemical Abstract Service CBI Confidential business information CEPA Canadian Environmental Protection Act CMRs Carcinogens, mutagens, and reproductive toxicants ComET Complex Exposure Tool ComHaz Complex Hazard Tool CSR Chemical Safety Report DNEL Derived no-effect level DSL Domestic Substances List EC Environment Canada ECA Enforceable Consent Agreements EIA Extended Impact Assessment EINECS European Inventory of Existing Commercial Chemical Substances ELINCS European List of Notified Chemical Substances EPA U.S. Environmental Protection Agency EU European Union GHS Globally Harmonized System GLP Good Laboratory Practice GPE Greatest potential for exposure HC Health Canada HPV High Production Volume IPE Intermediate potential for exposure iT Inherently toxic ITC Interagency Testing Committee IUR Inventory Update Reporting LPE Lowest potential for exposure NDSL Non-Domestic Substances List NOC Notice of Commencement NOEQ Notice of Excess Quantity NOMI Notice of Manufacture or Import NPEs Nonylphenol ethoxylate surfactants NSN New Substances Notification OECD Organization for Economic Cooperation and Development OMB Office of Management and Budget OPPT U.S. EPA Office of Pollution Prevention and Toxics P Persistence PAIR Preliminary Assessment Information Reporting Rule

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List of Acronyms , continued PBDEs Polybrominated diphenyl ethers PBiT Persistent, bioaccumulative and inherently toxic PBT Persistent, bioaccumulative and toxic PCBs Polychlorinated biphenyls PFOA Perfluorooctanoic acid PMN Premanufacture Notification PNEC Predicted no-effect concentration POPs Persistent organic pollutants PSL Priority Substance List QSAR Quantitative structure-activity relationship R&D Research and development REACH Registration, Evaluation, Authorization and Restriction of Chemicals SAR Structure-activity relationship SIDS Screening Information Data Set SimET Simple Exposure Tool SimHaz Simple Hazard Tool SNAc Significant New Activity Notice SNUN Significant New Use Notice SNUR Significant New Use Rule SVHCs Substances of Very High Concern TSCA U.S. Toxic Substances Control Act UVCBs Substances of Unknown or Variable composition, Complex reaction

products or Biological materials VOC Volatile organic compound

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I. Introduction Historically, policies governing industrial chemicals have granted them a “presumption of innocence.” In the absence of clear evidence of harm, companies have largely been free to produce and use such chemicals as they’ve seen fit. When countries first enacted statutes governing industrial chemicals and their management beginning in the mid-1970s, this laissez-faire approach was most directly codified through the decision to “grandfather in” the tens of thousands of chemicals in commerce at time of enactment (the so-called existing chemicals), allowing them to continue to be made and used without restriction. Implicit in this decision was the presumption that the chemicals were safe—surely, we would have discovered by now if it were otherwise—even though very few had been tested or reviewed for possible health or environmental effects. A corollary consequence of these policies relates to who shoulders the burden of proof. Under current policies, it is government (and hence the public) that must demonstrate a chemical is or could be harmful before any action can be taken, rather than those who produce and use chemicals bearing the burden of demonstrating, or even providing the information necessary to determine whether, they are safe. This hands-off approach contrasts sharply with the scheme—closer to “presumed guilty until proven innocent”—adopted for other classes of chemicals such as pharmaceuticals and pesticides, generally regulated under different statutes; for these substances, producers have the burden of providing information to government demonstrating their safety, at least when used as intended. These classes of chemicals have been considered more likely to pose risks because they are intentionally designed to be biologically active, whereas most industrial chemicals are not. Nonetheless, there is sufficient evidence of the potential for many industrial chemicals to pose risks, certainly enough to warrant gathering basic information to be able to judge which are likely to be harmful. The European Commission noted that about 70% of all new substances assessed under existing European Union (EU) legislation have at least one dangerous property. It concludes that “[a]n unknown but potentially significant proportion of all chemical substances will enter the environment and reach sufficiently high concentrations to induce adverse effects.”1 The recently completed Domestic Substances List (DSL) Categorization process mandated under the Canadian Environmental Protection Act (CEPA) that examined all 23,000 previously unassessed existing chemicals on the DSL identified more than 4,300 substances possessing hazard or exposure characteristics sufficient to warrant further assessment.2 Even if one believes that only a small number of existing chemicals pose any risk, the key is to identify them; the fact that they are already in use should not excuse them. Yet only a few

1 European Commission, Extended Impact Assessment, COM(2003)644 final, SEC(2003)1171/3, 29 October 2003, p. 27, available at http://ec.europa.eu/enterprise/reach/eia_en.htm. 2 See “Summary of Government of Canada Categorization Decisions for Substances on the DSL,” available at www.ec.gc.ca/substances/ese/eng/dsl/cat_gc_decisions.cfm. As noted by Environment Canada: “The purpose of categorization is not to establish the risks to the environment or human health. Any such risk must be additionally investigated through a screening assessment of the substance.” See www.ec.gc.ca/substances/ese/eng/dsl/cat_background.cfm. Nonetheless, sufficient evidence of potential risk based on available information has been found for these chemicals to warrant their further investigation, including development of more and better information about them.

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hundred of the tens of thousands of industrial chemicals in use have been subjected to formal assessment, and at most a few thousand to requests for data relating to their potential risks. One reason that so few chemicals have been identified as posing sufficient risk to warrant assessment or control under the current policies is the enormous difficulty in determining whether any given chemical poses a problem in actual use. This is itself a reason to require more testing under controlled laboratory conditions, however, rather than continue what amounts to an uncontrolled, large-scale experiment in the real world. Among the major challenges to documenting and quantifying the contribution of chemicals to human disease and environmental impacts are:

• isolating the contribution of chemicals generally, let alone any single one, to observed human or environmental health problems, given the multifactorial nature of most diseases and environmental impacts; and

• translating any observed correlations into evidence of causation. Typically, these obstacles have been overcome only after damage is done—once widespread and long-term exposures have occurred—and then only through large-scale and very expensive epidemiological study.3 It would be far better to ensure that an appropriate degree of data development and assessment is conducted to identify those chemicals that pose sufficient concern to warrant more scrutiny, and those unlikely to pose significant risk, which may well become candidates to replace riskier ones. These policies, which dictate how we manage the tens of thousands of industrial chemicals in commerce, bear two other hallmarks in practice. First, by allowing action only once there is clear evidence of harm, they do not reward, and may well provide a sizeable disincentive against, the gathering of better information about chemicals. A company is likely to view undertaking this activity as only increasing the likelihood that evidence of harm will be uncovered. Existing policies place significant burdens on governments that must be met even before they can request such information of industry. In what amounts to a classic Catch-22, government must already have information sufficient to document potential risk, or at the very least extensive exposure, in order to require development of information sufficient to determine whether there is actual risk. In the U.S. the burden is sufficiently high that, in the 30 years since the Toxic Substances Control Act (TSCA) was enacted, the U.S. Environmental Protection Agency (EPA) has required testing for fewer than 200 chemicals.4 Second, such policies place an even higher burden on government to act to control a chemical based on any information it does manage to obtain that is indicative of significant risk. To

3 European Commission, EIA, pp. 24-25. 4 U.S. Environmental Protection Agency, Overview: Office of Pollution Prevention and Toxics Programs, January 2007, prepared by OPPT (“OPPT Overview, 2007”), p. 4, available at www.epa.gov/oppt/pubs/oppt101c2.pdf.

Government must already have information sufficient to document potential risk, or at the very least extensive exposure, in order to require development of information sufficient to determine whether there is actual risk.

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extend our courtroom analogy, government must effectively prove beyond all reasonable doubt that a chemical poses a risk before it can take any action to restrict its production or use. And it must typically make its case despite operating under a highly constrained “right to discovery,” with quite limited options for obtaining or compelling the generation of information from producers or users of the chemical. Current policies essentially say: “We’ll consider developing a better understanding only of those chemicals for which we already have good reason to believe they pose a risk.” Not only is this approach plagued by the Catch-22 just noted, it is rather like the old adage about looking for lost car keys at night only under the streetlight because the light is better there. Society remains largely ignorant about the risks of the great majority of chemicals, because we only investigate those about which we already know something. That means we fail to learn not only which chemicals pose risks, but also which chemicals pose little or no risk. So when it comes to choosing among several available options to provide a desired chemical function, or to replacing a problematic chemical, we are often in the dark and run the risk of simply “replacing the devil we know with the devil we don’t.” The potentially enormous benefit of adopting a more comprehensive approach that seeks to develop risk profiles for most or all chemicals would be the ability to select safer chemicals with confidence. Only for so-called new chemicals—those industrial chemicals brought into production or commerce after such laws were passed—do existing policies mandate any routine scrutiny by government, either as a precondition for commencing manufacture or marketing (the U.S. and Canadian systems) or a condition for continuing to do so (the Canadian system and the EU system that preceded REACH). Even with new chemicals, the requirements imposed on manufacturers to provide advance information and to update that information as production and use change vary considerably among countries. There is extensive debate about how high the burden should be on government to show evidence of harm in order to prevent a chemical from entering the market or restricting its use.5 In recent years, the wisdom of a reactive rather than proactive approach to chemicals policy has been increasingly questioned. What has led to this? First is a growing recognition that the manufacture and use of chemicals can play a role as a causative agent of human disease and environmental impacts and as a source of contamination of human tissues, wildlife and environmental media (air, water, soil, sediment). Numerous chemicals are documented as disease agents in occupational settings, and are major contributors to the high incidence of certain diseases among workers. These causative links are well established because of the frequently high exposures and the extensive epidemiological study done of such exposures. But even outside workplaces, chemical exposures have been implicated, though definitive proof is often lacking, as contributors to certain human diseases.6 The ability of certain chemicals to exert effects, e.g., to

5 Ironically, it is often argued that the “more onerous” review required for new chemical approval serves as a disincentive to innovation, by placing such chemicals at a disadvantage in relation to those un- or under-assessed existing chemicals they might be able to replace. 6 The European Commission (EIA, p. 25) cited and summarized a 2001 World Bank study (K. Lvovsky et al., “Health and Environment Strategy Papers,” No. 1, World Bank Working Paper 24096, 2001) as follows: “[The study] estimates that in established market economies pollution from agro-industrial chemicals and chemical pollution from diffuse sources cause

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disrupt the endocrine systems of wildlife, even at very low concentrations is a further indicator of the potential for certain chemicals to cause harm.7 Equally disturbing is the accumulation of certain chemicals in wildlife and the environment, even in regions remote from sites of production and use, and the detection of a diverse array of chemicals, albeit often in low concentrations, in human tissues and fluids. Chemicals widely used in consumer products and thought to be safely embedded in polymers or other matrices and hence posing no risk of exposure—including phthalates used as plasticizers, polybrominated diphenyl ethers (PBDEs) used as flame retardants, and several families of perfluorinated chemicals used in coatings for textiles, cookware and food packaging—are now present in the bodies of virtually all people on earth. The ubiquity of such observations—coupled with the inability of our chemicals assessment systems to have predicted or prevented them, or to explain how such chemical exposures have become so widespread—has lent urgency to the calls for major reforms. The heated debate over the significance of these trends and the contribution of chemicals manufacture and use to them highlights the dearth of information available to resolve such questions. Perhaps the most glaring failure of existing policies is their inability to generate reliable information on the vast majority of industrial chemicals in use today. In most cases we lack the information needed to determine which chemicals are safe, whether the observed accumulation of chemicals in the environment and human bodies poses serious risk, and whether the methods employed to manage chemicals are sufficient to minimize the risks. Decades of this passive approach allowed the largely unquestioned use of tens of thousands of industrial chemicals without evidence of their safety. Today, however, efforts are finally beginning to address this legacy of un- or under-assessed chemicals. For example:

• In the U.S., the voluntary High Production Volume (HPV) Chemical Challenge is well along in developing and making public a basic set of hazard information on some 2,000 HPV chemicals—defined as those produced at one million pounds or more annually; these data will be used to conduct screening-level hazard assessments and prioritize HPV chemicals for further scrutiny.

• Under a mandate enacted in the 1999 revisions to CEPA, the Canadian government completed a categorization of the roughly 23,000 previously unassessed chemicals on its DSL. Using available information, the exercise identified those chemicals that pose the greatest potential for exposure of the general population in Canada, as well as persistent or bioaccumulative substances considered "inherently toxic" to humans or to nonhuman organisms. A follow-up program to generate or collect additional information and

between 0.6% and 2.5% of the total burden of disease (that is, deaths and general ill health) with a central estimate of 1.5%. These estimates were based on conservative (5% of the total burden) and liberal (20% of the total burden) percentages of the amount of disease related to around 15 diseases (that is, not all health end-points were included). The degree of imprecision in these assumptions, which still represent expert estimates, by itself indicates that we do not have a robust feel for the impact of chemicals on the general health of the population.” 7 See, for example, European Environmental Agency, Europe’s Environment: The Third Assessment, State of Environment report No. 1/2003, Chapter 12: “Environment and Human Health,” available at http://reports.eea.europa.eu/environmental_assessment_report_2003_10/en/kiev_chapt_12.pdf.

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conduct screening-level risk assessments has been initiated to address the more than 4,000 substances that meet one or more of these criteria.

• Most ambitious of all is the EU’s new regulation called REACH, which stands for Registration, Evaluation, Authorization and Restriction of Chemicals. Adopted in December 2006, REACH will set up a relatively comprehensive system for registering the estimated 30,000 chemicals produced or imported in quantities of one metric ton (1,000 kilograms [kg] or about 2,200 pounds) or more per year per producer or importer.8 Base sets of production, use, hazard and, in some cases, exposure data are required for registration. Government can then evaluate registered substances and, for chemicals identified as “substances of very high concern,” allow only those uses that are explicitly authorized. REACH replaces an array of EU legislation and regulation roughly resembling that in place in the U.S. and Canada.

As described in the remainder of this report, these examples serve as microcosms of the chemicals policies in their respective jurisdictions, and provide insight into the opportunities and limitations offered by each.

Statutes forming the basis for the chemicals policies examined in this report This report focuses on so-called industrial chemicals, which typically exclude chemicals regulated under use-specific statutes. Hence chemicals used only as pharmaceuticals, cosmetic ingredients, pesticides or food additives, which are regulated under other statutes, are generally not considered “industrial chemicals.” The term is not intended to mean that such chemicals are used only in industry; many “industrial chemicals” are also present in consumer products. The statutes that comprise the basis for our comparison are:

• The Canadian Environmental Protection Act (CEPA), as amended in 1999.9

• The United States Toxic Substances Control Act (TSCA), 1976.10

• The European Union’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) Regulation, adopted in December 2006 and to take effect on June 1, 2007. Some aspects of other current EU chemicals regulations, as well as the previous regulations that REACH has supplanted, are cited where appropriate.11

8 An estimated 30,000 chemicals are produced or imported in amounts of one metric ton or more and are expected to be eventually registered under REACH. See European Commission, Joint Research Center, “Assessment of additional testing needs under REACH,” September 2003, Table 1, p. 12, available at http://ecb.jrc.it/documents/REACH/PUBLICATIONS/REACH_testing_needs_final.pdf. 9 CEPA 1999 is available at www.ec.gc.ca/CEPARegistry/the_act/Contents.cfm. In addition to industrial chemicals, which are the focus of this paper, CEPA applies to pharmaceuticals and cosmetic ingredients with respect to their environmental impacts and any health impacts resulting from environmental exposures. Primary authority for these substances is provided under the Food and Drugs Act. 10 TSCA is available at http://www4.law.cornell.edu/uscode/html/uscode15/usc_sup_01_15_10_53.html. 11 The final text of REACH was published in the European Union’s Official Journal, Volume 49, 30 December 2006, and is available at http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/l_396/l_39620061230en00010849.pdf.

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In considering the comparisons of these policies made throughout this report, it is important to keep in mind that REACH, unlike TSCA and CEPA, has yet to be implemented. Many critical elements of REACH remain to be developed, and how all of its provisions will work in practice remains to be seen. Nonetheless, the intense interest that has surrounded the development and adoption of REACH over most of the last decade is warranted: REACH represents an enormous sea change in chemicals policy, arising out of a view that current policies toward industrial chemicals were largely failing.12 Among the most revolutionary aspects of REACH are the following:

• “No data, no market”: REACH seeks to directly address the legacy of the large number of chemicals in commerce that were grandfathered into existing chemicals policies without requiring information to assess their potential risks. REACH’s registration process will require that, in order to enter or remain on the market, all nonexempt chemicals manufactured or imported in amounts of one metric ton or more per year per producer or importer must be registered and must meet specific data requirements.

• Burden shifting: REACH recasts the roles and relationship between government and industry by assigning industry the responsibility to develop risk information, assess it for indication of significant risk, and determine what risk management measures are needed and justify their adequacy. Government plays an oversight role. (Box 1 explores some of the implications of this shift in responsibility.)

• Information flow in chemical supply chains: REACH compels the bidirectional flow of information along the chain that links chemical producers, processors, distributors and users. It requires suppliers to inform their customers about the hazards and risks of their chemicals and about risk management measures that need to be applied. In turn, it requires users to give their suppliers sufficient information on their use(s) of a substance so the supplier can evaluate exposure and identify risk management measures that are then communicated back to the users.

• Authorization for use of substances of very high concern (SVHCs):13 REACH will disallow the use of high-concern substances except when explicitly authorized, and will only authorize a use where the producer or user has demonstrated its risks are “adequately controlled,” or that its benefits outweigh the risks and no feasible safer alternatives exist. (Box 5 explores the role that substitution plays in REACH’s authorization process.) The

12 See European Commission, White Paper: Strategy for a future Chemicals Policy, 2 February 2001, Brussels, available at http://ec.europa.eu/environment/chemicals/pdf/0188_en.pdf. 13 SVHCs include chemicals classified as carcinogens, mutagens or reproductive toxicants (CMRs) and certain persistent, bioaccumulative and toxic chemicals (PBTs).

REACH, unlike TSCA and CEPA, has yet to be implemented. Many critical elements of REACH remain to be developed, and how all of its provisions will work in practice remains to be seen.

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burden to make these showings is on the applicant for authorization, a major shift from policies that place the burden of demonstrating the converse on government.

This report will explore these and other novel elements of REACH, and will also highlight the uncertainties about how REACH will work in practice.

Key elements of chemicals policies U.S., Canadian and EU chemicals policies include elements related to tracking chemicals, developing risk information, assessing it for indication of significant risk, and acting to address any identified risks. These policy elements, which serve as the structure for the body of this report, include:

• Identifying and prioritizing chemicals of concern

• Identifying and tracking chemicals and their production and use

• Facilitating or requiring the generation and submission of risk-relevant information

• Assessing information to determine hazard/exposure/risk

• Imposing controls to mitigate risk

• Sharing and disclosing information and protecting confidential business information This report will seek out lessons to be gleaned from a comparative look at the U.S., Canadian and EU (REACH) approaches to chemicals assessment and management, identifying “best practices”14 for each of the core functions above that draw on one or more of these approaches. The aim is to help move our societies toward policies that are knowledge-driven; that motivate and reward, rather than impede and penalize, the development of information sufficient to provide a reasonable assurance of safety for chemicals. Such policies would also place more of the burden of providing and acting on that information on those who stand to profit financially from the production and use of chemicals, and are in the best position to internalize such information and use it to minimize risk from their products. (For more discussion of who should bear responsibility, see Box 1.)

Box 1: Who should bear responsibility? One fundamental difference among the current and emerging policies discussed in this report—and a key decision to be made in any chemicals policy—concerns the roles and responsibilities assigned to government and industry. REACH is truly revolutionary in its recasting of the social contract between these entities. REACH assigns to industry the core responsibility—and considerable authority—for the trifecta of chemicals policies: developing risk information, assessing it for indication of significant risk and deciding what risk management to employ and whether it is adequate. REACH’s preamble puts it like this:

14 The term “best practices” is used somewhat loosely because REACH has yet to go into practice.

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“Responsibility for the management of the risks of substances should lie with the natural or legal persons that manufacture, import, place on the market or use these substances. …Therefore, the registration provisions should require manufacturers and importers to generate data on the substances they manufacture or import, to use these data to assess the risks related to these substances and to develop and recommend appropriate risk management measures.”15

Under REACH, government largely plays an oversight role, with authority—but only limited obligation—to evaluate industry’s assessments, require more information or testing, or impose controls. Although REACH mandates that criteria for prioritizing chemicals for risk evaluation be developed, government is not required to evaluate the risks of registered chemicals, including the information submitted by registrants, within a given timeframe. Unless government selects a substance for in-depth evaluation under REACH, the only information and recommended risk management available for the substance is that provided by the registrant, subject to little more than a completeness check by government. Many existing systems for industrial and other types of chemicals assign responsibility to industry to generate risk data, but it is virtually unprecedented for government to assign the core responsibilities of risk assessment and decisions about risk management to industry. Few would argue with the practical necessity of assigning the testing burden to industry. The U.S. Toxic Substances Control Act states: “It is the policy of the United States that adequate data should be developed with respect to the effect of chemical substances and mixtures on health and the environment and that the development of such data should be the responsibility of those who manufacture [defined by the statute to include import] and those who process such chemical substances and mixtures.”16 Can industry be trusted to generate reliable data? Some argue that having industry generate risk information is the only way to move toward “green chemistry,” where industry develops the needed expertise and integrates safety considerations into the core functions of developing new chemicals and products, and reviewing and assessing existing products. Otherwise, what incentive would it have to design safer chemicals? Others argue that only data generated by the government or by independent laboratories can be trusted, and that industry should be involved only as far as footing the bill. Although such data may be more reliable, who would decide when a new chemical is sufficiently close to commercialization to hand it over to government for testing? And where would liability lie if such testing proved inaccurate or missed something? (See Box 4 for further discussion of steps to ensure the credibility of industry-generated information.) This debate notwithstanding, REACH goes much further. There are clear philosophical and practical attractions to placing the burden of chemical risk assessment and management on the producers of chemicals. But its implications with regard to accuracy of information and adequacy of risk management are also essential to consider: 15 REACH Preamble, paragraphs 18 and 19. 16 TSCA §2(b)(1). Emphasis added.

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• If government is sufficiently resourced to conduct prompt reviews and to address any deficiencies in industry’s assessments and management, such an approach may succeed. (It is debatable, however, whether it would be more cost-effective than a system wherein government retains the responsibility to conduct assessments and impose risk management requirements. Advocates for the REACH approach argue that it requires industry to fully document and be legally accountable for the veracity of its information and the soundness of its actions. They also believe that reviewing that documentation should require less effort than creating it. But in practice it is often more difficult—with respect to both political and resource commitments—to rebut a standing assessment than to defend one’s own.)

• If government is insufficiently resourced—as could occur if those setting budgets believe that the bulk of the burden has been shifted to industry, or if in times of tight budgets they cut oversight programs—then it must be asked whether industry’s assessments and self-designed risk management plans are better than none. REACH will produce more risk assessments and management plans per unit of time than government has; indeed, a major motivation for REACH was the exceedingly slow pace of government assessment and action on chemicals.17 But it is difficult to imagine that many of the assessments submitted by industry will indicate significant risk of the chemicals in question.

It is evident that a strong government capability dedicated to chemical risk assessment and management is an essential element of any sound chemicals policy. Clear rules are needed that ensure transparency and accountability for the generation of data, its assessment and the resulting actions, regardless of who conducts these activities.

17 See European Commission, White Paper: Strategy for a future Chemicals Policy, 2001, p. 6.

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II. Identifying and prioritizing chemicals of concern The U.S., Canadian and REACH systems differ in their criteria for identifying and prioritizing chemicals of concern regarding potential hazards or risks to human health and the environment. These criteria form the backbone of the policies, influencing all other aspects of how chemicals are assessed and managed. This section compares the criteria underpinning each of the three systems.

UNITED STATES TSCA articulates a core conceptual criterion of “unreasonable risk.” This criterion is laid out in §2(b), which places it squarely within the overall policy approach under TSCA:

“POLICY.—It is the policy of the United States that— (1) adequate data should be developed with respect to the effect of chemical substances and mixtures on health and the environment and that the development of such data should be the responsibility of those who manufacture and those who process such chemical substances and mixtures; (2) adequate authority should exist to regulate chemical substances and mixtures which present an unreasonable risk of injury to health or the environment, and to take action with respect to chemical substances and mixtures which are imminent hazards; and (3) authority over chemical substances and mixtures should be exercised in such a manner as not to impede unduly or create unnecessary economic barriers to technological innovation while fulfilling the primary purpose of this Act to assure that such innovation and commerce in such chemical substances and mixtures do not present an unreasonable risk of injury to health or the environment.”

The unreasonable risk criterion is further elaborated in other sections of TSCA. For EPA to take regulatory action to control any chemical in commerce, it must first find that the chemical “presents or will present an unreasonable risk of injury to health or the environment.”18 Before initiating any regulatory action, EPA must consider more than whether the chemical is harmful and if there are significant exposures to it. It must also consider the economic and social costs of imposing controls on the chemical, including the benefits of the chemical, the availability of alternatives, and the impact of regulation on the economy, small businesses and innovation.19 It must demonstrate that the proposed control is the least burdensome it could have proposed.20 Finally, it must demonstrate that no other statute could address the concern.21 According to EPA, “The unreasonable risk finding can be characterized as a judgment that the risk of health or environmental injury from the substance/mixture outweighs the burden to society of potential regulations.”22

18 TSCA, §6(a). Emphasis added. 19 TSCA, §6(c)(1). 20 TSCA, §6(a). 21 TSCA, §§6(c) and 9. 22 See EPA, “EPA Authorities under TSCA,” OPPT, 11 July 2005, p. 18, available at www.epa.gov/oppt/npptac/pubs/tscaauthorities71105.pdf, citing 59 Federal Register 11138 (9 March 1994).

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A somewhat lesser burden is imposed under TSCA in two other cases: first, when EPA finds that insufficient information is available on a new chemical to assess its potential risks and seeks to prohibit or limit it pending development of more information, and second, when EPA seeks to require testing of new or existing chemicals. In these cases, EPA must demonstrate that the chemical:

• “may present an unreasonable risk of injury to health or the environment,” or

• “is or will be produced in substantial quantities,” and

o “enters or may reasonably be anticipated to enter the environment in substantial quantities,” or

o “there is or may be significant or substantial human exposure” to the substance.23 This determination does not necessarily require that both the effects of a chemical and the magnitude of exposure be considered, and it does not introduce the other factors discussed earlier. To require testing, however, EPA must also demonstrate that:

• there is insufficient information to determine the effects of the chemical on health or

the environment,24 and

• testing is necessary to develop such information.25

Any prohibition or limitation on a new chemical issued by EPA only applies pending submission of the specified information;26 any permanent regulation of a new chemical still requires EPA to find that it “presents or will present an unreasonable risk.”27 Beyond this broad criterion, TSCA does not specify other criteria for identifying chemicals of concern; EPA has articulated more specific criteria in only a few cases. In 1999, EPA published a policy statement that set forth criteria it would use to identify persistent (P) and bioaccumulative (B) substances, in the context of reviewing new chemicals under TSCA.28 These criteria are used to identify putative persistent, bioaccumulative and toxic (PBT) chemicals, which would be confirmed or negated by requiring additional testing. Two tiers of criteria were established:

• Half-life greater than two months and a bioconcentration or bioaccumulation factor (BCF/BAF) greater than or equal to 1,000: For chemicals exceeding these criteria, the outcome of new chemical review could be a TSCA §5(e) Consent Order that allows manufacture to commence but imposes exposure or release controls and testing requirements (see Section VIA below); and

23 TSCA, §4(a)(1)(A)(i) and §5(e)(1)(A). Emphasis added. 24 In practice, this requirement can be extremely onerous and consume substantial resources, as it compels an extensive search for information. It can also be viewed as effectively having to prove the nonexistence of sufficient information. 25 TSCA, §4(a)(1)(A)(ii) and (iii). 26 TSCA, §5(e). 27 TSCA, §5(f). 28 See www.epa.gov/fedrgstr/EPA-TOX/1999/November/Day-04/t28888.htm.

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• Half-life greater than six months and BCF/BAF factor greater than or equal to 5,000: For chemicals exceeding these criteria—which EPA notes are equivalent to those used internationally to identify persistent organic pollutants (POPs)—the outcome of new chemical review could be a TSCA §5(e) ban pending testing.

However, TSCA does not require manufacturers to submit a minimum data set when they notify EPA of their intent to produce a new chemical (see Section IVA). Unless the manufacturer chose to submit data relevant to assessing P and B, it is unclear how EPA would identify a chemical as a putative PBT. Estimation models using structure-activity relationships (SARs) exist for predicting these parameters, although they require certain input physical-chemical data that may not always be available for a new chemical. Where EPA is able to determine, “based upon available test data, SAR and professional judgment,” that a chemical is a possible PBT, this policy sets forth a testing strategy that EPA would likely impose on the manufacturer, first, to confirm that the chemical has P and B characteristics, and second, to test for certain toxicity endpoints. No criteria for the latter are established, however, and such a determination would be made on a case-by-case basis. EPA has articulated two different sets of criteria for “substantial” production or release and “significant or substantial” human exposure: one in the context of developing regulations mandating testing of a chemical already in commerce under TSCA §4,29 as discussed in Section IVB; and the other in the context of imposing testing requirements on certain new chemicals under TSCA §5,30 as discussed in Section IVA. EPA has no other specific hazard or exposure criteria for use in a regulatory context to identify chemicals of concern, although it has agreed to use certain criteria from the Globally Harmonized System (GHS) for the Classification and Labeling of Chemical Substances31 to screen data generated by its HPV Chemical Challenge Program; see Section VB.

CANADA The core conceptual criterion under CEPA 1999 for identifying chemicals of concern is the definition of the term “toxic” under §64:

“A substance is toxic if it is entering or may enter the environment in a quantity or concentration or under conditions that:

(a) have or may have an immediate or long-term harmful effect on the environment or its biological diversity;

(b) constitute or may constitute a danger to the environment on which life depends; or (c) constitute or may constitute a danger in Canada to human life or health.”

29 See www.epa.gov/opptintr/chemtest/pubs/sct4rule.htm. 30 See www.epa.gov/oppt/newchems/pubs/expbased.htm. 31 Organization for Economic Cooperation and Development (OECD), Series on Testing and Assessment, Number 33, 14 August 2001. Harmonised Integrated Classification System for Human Health and Environmental Hazards of Chemical Substances and Mixtures, available at www.oecd.org/LongAbstract/0,2546,en_2649_34365_2671862_1_1_1_1,00.html.

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A substance may be “suspected” of being toxic if either its hazards or exposure potential are of concern.32 CEPA’s definition makes clear that “toxic” encompasses consideration of both hazard and exposure, and hence is an indication of risk. There are two key distinctions between CEPA’s “toxic” criterion and TSCA’s “unreasonable risk” criterion. First, under CEPA, the determination of whether a chemical is CEPA-toxic and requires regulatory or other risk management action is separate from the determination of how risk should be managed.33 The former decision does not require consideration of economic and social factors, the benefits of the chemical or the availability of alternatives, although these types of factors do influence the latter decision about what risk management measures to impose. Second, whereas taking regulatory action requires a finding that a chemical is CEPA-toxic, the definition of that term is broad, encompassing both the potential and actuality for a chemical to cause adverse effects or constitute a danger. In this regard, the term more closely resembles the TSCA “may present an unreasonable risk” formulation. As a result of these distinctions, the difference between the burdens on government to take action of existing vs. new chemicals does not appear to be as large under CEPA as it is under TSCA. With respect to identifying substances of concern, CEPA’s new chemicals program utilizes production quantity and release or exposure criteria to trigger specific information requirements for notifiers of new chemicals; see Section IVA. As described in more detail in Section IVB, when CEPA was reauthorized in 1999, it mandated that Environment Canada and Health Canada categorize the roughly 23,000 chemicals on its Domestic Substances List (DSL). Categorization entailed developing and applying specific criteria to identify which chemicals were: a) persistent, b) bioaccumulative, c) inherently toxic to humans or nonhuman organisms, or d) of greatest potential for exposure to humans, based on available information. These criteria have also been used to further prioritize among those found to meet the criteria. To this end, Environment Canada used the following criteria:34 • Persistence: Medium Half-life

Air � 2 days Water � 182 days Sediment � 1 year Soil � 182 days

32 Guidelines for the Notification and Testing of New Substances: Chemicals and Polymers, Pursuant to Section 69 of the Canadian Environmental Protection Act, 1999. Copublished by Environment Canada and Health Canada. Version 2005–EPS M-688, Section 9.4.2, p. 97, available at www.ec.gc.ca/substances/nsb/pdf/cpguidem688.pdf. 33 See General Accounting Office Report GAO/RCED-94-103, Toxic Substances Control Act – Legislative Changes Could Make the Act More Effective (1994), p. 26, available at http://archive.gao.gov/t2pbat2/152799.pdf. 34 See “DSL Categorization under CEPA 1999 Section 73: Ecological Categorization Criteria and Process,” available at www.ec.gc.ca/substances/ese/eng/dsl/cat_criteria_process.cfm. The criteria for persistence and bioaccumulation are identical to those used under Canada’s Toxic Substances Management Policy to identify chemicals of very high concern (described further in Section VIB); see Table 1, p. 8, available at www.ec.gc.ca/toxics/TSMP/en/tsmp.pdf.

II-5

• Bioaccumulation: Bioaccumulation factor (BAF) � 5,000 or Bioconcentration factor (BCF) � 5,000 or Log KOW

35 � 5 • Toxicity: Acute and chronic toxicity to aquatic organisms (fish, invertebrates, algae):

LC50 or EC50 � 1 mg/L or NOEC �0.1 mg/L36

Health Canada (HC) used the following criteria:37 • Greatest potential for exposure (GPE) to humans: As further described in Section IVB, HC first

ranked all DSL chemicals on the basis of the production quantity, number of submitters and expert-derived use code indices that correlated type of use with expected level of exposure. This step used data collected in 1984–1986, when the DSL was first being developed. HC then used the following criteria for each of these three parameters to identify substances with greatest (GPE), intermediate (IPE) and lowest (LPE) potential for exposure:

Quantity (kg/year) # of submitters Sum of expert ranked use code indices

GPE >100,000 Top 10% Top 10% IPE >10,000 All Top 30% LPE All All All Only substances meeting all three of the highest-tier criteria were considered GPE. • Inherent toxicity: As further described in Section IVB, HC developed specific criteria for each

of the health endpoints it considered; these criteria are shown in Table 1.

EUROPEAN UNION Two sets of criteria will play pivotal roles in REACH. One is inherited from another EU regulation: classifications of chemicals as “dangerous” using criteria specified under the EU’s Directive on Dangerous Substances.38 Sixteen classes of dangerous substances, and specific criteria for each (not included here), have been delineated: 35 KOW = octanol-water partition coefficient 36 LC50 is the concentration of a substance